The median raphe nucleus (MRN) is the primary source of serotonergic afferents to the limbic system which are generally considered to suppress hippocampal theta oscillations. GABA receptors are expressed in the MRN by serotonergic and non-serotonergic cells, including GABAergic and glutamatergic neurons. This study investigated the mechanisms by which the fluctuating GABA tone in the MRN leads to induction or suppression of hippocampal theta rhythm. 1. We found that MRN application of the GABA_A agonist muscimol (0.05-1.0 mM) or GABA_B agonist baclofen (0.2 mM) by reverse microdialysis had strong theta promoting effects. 2. The GABA_A antagonist bicuculline infused in low concentrations (0.1, 0.2 mM) eliminated theta rhythm. A short period of theta activity of higher than normal frequency preceded hippocampal desynchronization in 46% of rats. 3. Bicuculline in larger concentrations (0.5, 1.0, 2.0 mM) resulted in a biphasic response of an initial short (<10 min) hippocampal desynchronization followed by stable theta rhythm which lasted as long as the infusion continued. The frequency and amplitude of theta waves were higher than in control recordings and the oscillations showed a conspicuous intermittent character. 4. Hippocampal theta rhythm elicited by MRN administration of bicuculline could be completely (0.5 mM bicuculline) or partially (1.0 mM bicuculline) blocked by simultaneous infusion of the GABA_B antagonist CGP35348. Our findings suggest that the GABAergic network may have two opposing functions in the MRN: relieving the theta-generators from serotonergic inhibition and regulating the activity of a theta-promoting circuitry by the fluctuating GABA tone. The two mechanisms may be involved in different functions.